With the recent launch of the Avis blog and the ever growing focus on consumer generated content tactics we thought it might be helpful to take a step back and have a look at the strategic side of CGC in a multi-part series starting today, quite appropriately, with a focus on the consumer.

The world of corporate marketing and reputation management is currently experiencing a quantum leap in consumer orientation due to three primary factors:

1. Consumer-based Business Valuation
The Net Promoter Score (NPS) is recognized as the most accurate consumer metric for projecting business growth. Creator, Fred Reichheld of Bain & Co., measured the number of consumer “Promoters” (those who would recommend a product or services) and “Detractors” (those who actively discourage the use of a product or service) of hundreds of companies across many categories finding that on average the NPS leader grows at 2.5x its competition

2. Persuasiveness of Word-of-Mouth (WOM)
Marketers have long believed that person-to-person conversations are among the most persuasive, research now confirms this:

• 90% of people cite Word of Mouth (WOM) as one of the best sources of ideas and information -eMarketer Word of Mouth Report 2005
• Consumers are 50%+ more likely to be influenced by WOM than traditional ads. - Intelliseek September 2005
• “Whether the connection is long or short, the person-to-person information exchanged online carries a weight that traditional corporate messaging simply can’t match.” - eMarketer Word of Mouth Report 2005

3. Pervasiveness of Consumer Generated Content (CGC)
The growth of online conversation about products and services is stratospheric; participation in Usenet groups, forums, social networks, review sites, blogs, photo sharing, video sharing, etc. continues to grow rapidly and the use of tagging and search engines makes the information readily discoverable by consumers.

Today, CGC is WOM online, and its effect on the consumer purchase funnel is significant. Consumers discover influential discourse from peers at the most critical moments leading up to a purchase. And after the purchase, the consumer often becomes yet another creator of this content, adding their voice to the conversation and their consumer experience to the public domain.

Consumer adoption of the Internet as a channel of commerce and communication is evolving marketing and reputation management as we speak.

“Studies show that positive WOM is likely to increase consumers’ purchase intentions… help create a favourable image toward the brand… and subsequently decrease a firm’s overall promotional expenditures. Conversely, negative WOM is likely to dissuade potential buyers from considering a particular product or brand, thus damaging the company’s reputation and financial position” - Advances in Consumer Research Volume 25, 1998

“Satisfied customers become, in effect, part of the company’s marketing department, not only increasing their own purchases but also providing enthusiastic referrals… customer loyalty provides companies with a powerful financial advantage— a battalion of credible sales and marketing and PR troops who require no salary or commissions.” - Fred Reichheld The Ultimate Question

The question is not if Consumer Generated Content is vital to a brand, but how it is best utilized.

web liquid, word of mouth, consumer generated content, consumer generated insight